South Korea’s exports fell less than expected in December, although shipments did contract for a 13th consecutive month.
Exports dropped 5.2%, much better than the 8.6% decline consensus expected. Imports, meanwhile, fell 0.7% versus an expected 7% slide.
The relatively shallow declines come after first-20 days export figures out earlier in the month showed signs of improvement.
For the full year, South Korea’s exports fell 10.3%, primarily due to a grievous slump in the global chip market. Between weakness in semis and the trade war, regional bellwethers including South Korea, Singapore and Hong Kong (with the latter’s tribulations exacerbated by idiosyncratic, internal factors), had a rough go of things and will be happy to see the calendar flip.
Chip exports dove 17.7% last month from a year earlier. That sounds bad – and it is – but it nonetheless represents an improvement at a time when the market has come to expect declines of 30% or more.
Notably, exports to China rose 3.3% in December. That too was tipped in the first-20 days data and looks to us like the first positive print in 14 months.
South Korea was also burdened in the second half of 2019 by the worst diplomatic row with Tokyo in recent memory. That dispute remains “live”, so to speak. Making matters worse is the suddenly icy relationship between former “BFFs” Donald Trump and Kim Jong-Un.
Earlier this week, inflation data showed the country climbing further out of the hole as consumer prices rose 0.7% in December. South Korea briefly flirted with outright deflation in September.
For the year, inflation came in at just 0.4%. That’s the lowest since data began in 1966.